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IDC: Bubble or Gold?
Within one year there have been set up over 80 Internet Data Center (IDC) companies in China with more than 20 in the south. The current service capability, as is estimated, is two times that of users' demand, but domestic and overseas investors are still rising in number.
Experts worry if IDC is pressed up rapidly by capital without market base, it would possibly follow the suit of dot coms. While Chen Yi, head of Guangzhou's biggest IDC New Generation Data Center (GZIDC), says bubbles come from too much hope pinned by investors on dot coms and this can be avoided in IDC field.
Optimistic opinion is that services provided by IDC are practical which can bring benefits to users in business. After a long time of disorder IDC market would become mature gradually therefore impossible to end up as the "last barrel of gold" of Internet. But experts still call for caution in entering IDC field.
Value-added services are essential At an IDC symposium held in Guangzhou not long ago, an IBM manager for information system service in south China Feng Baoquan says it's essential for future IDC providers whether they can offer value-added services that users need, and this decides whether they would survive and net profits.
Experts say IDC must shift to value-added services if they want to live. An IDC needs at least 1,000 or 5,000 square meters to house computers, at a per- square-meter cost of 20,000 yuan. An input amount of 20m yuan will have to be made at least to set up an IDC not to include costs on human resources and technology and even 100m yuan that will have to be put in when talking about a scale one to be launched. Besides, you must secure a 50 percent computer service rental rate if you don't want to run in red. Actually no more than a small batch of IDC claim so many users but benefits of value-added services are ten times that of renting service.
Foreign capital in, market heating upThe ballooning IDC industry has loomed as a 'wedge point' for foreign capital to enter China's Internet and communication fields after China's entry into WTO and the opening of telecom industry.
By now, a number of multinationals have extended their tentacles to the country's IDC market in the way of cooperation with domestic companies in an attempt to share the added value incurred by IDC.
IBM, the world largest communication product, service and e-commerce resolution supplier, has recently declared to co-invest 50 million yuan with Shanghai Telecom to construct an Internet data center in Shanghai. Both sides have made it clear that one of their major businesses is to provide IDC value-added service for enterprises' e-commerce.
Meanwhile, SUN, the biggest competitor for IBM around the world, has also not sat on its hands in front of China's lucrative IDC market and it has invested a total of 20 million US dollars in 8 IDC companies in China.
Experts in the circle point out that foreign capital's pooling will not only help upgrade the level of China's domestic IDC, but also pose great challenges to domestic IDC with overseas IDC giants barged in and decontrol of basic resources after China's entry into WTO.
By PD Online Staff Li Heng
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